Laura Kadue won't be studying economics this semester, but that isn't stopping her from conducting a cost-benefit analysis. This academic exercise isn't taking place in the library or in her dorm room. It is playing out while she weighs textbook prices at the George Washington University bookstore.
"I was going to get my books at the store, but people have been saying they're cheaper other places," like on Amazon.com, she says. That could save her some serious money. Her most expensive book, a calculus textbook, is $289.
A few aisles away, second-year political science Ph.D. student Lucas Winter considers his options. He could rent his books, he says, as he points to the prices on one of his course books—$35 to buy it new, $22.75 to rent it.
"It's not worth it," he says. With such a small price difference, says Winter, he might as well pay full price and keep the book.
Students currently have more textbook-procurement options than ever: buy them new or used (at the bookstore or online), rent them, or buy or rent e-textbooks on their Kindles or iPads. However, as students like Kadue and Winter choose, their prices are being constantly pushed upward. According to the Labor Department, textbook prices as of July were 8.1 percent higher than in July 2011, while prices for all goods only grew by 1.4 percent overall.
That trend is long-standing. A 2005 Government Accountability Office report showed that college textbook prices grew at twice the rate of inflation from 1986 to 2004.
Where does all that money go? According to figures from the National Association of College Stores, an average of 21.6 cents of every dollar spent on a new textbook will go to the bookstore, whether for personnel costs, operations, or income. For Kadue's $289 textbook, that's around $62. Another cent of every dollar pays for the freight of shipping a heavy book around, so subtract another $3 from her cost. That leaves around $224 that goes to the publisher, or around 77.4 cents for every dollar.
NACS no longer receives information from publishers about where textbook money goes, but as recently as 2008, they provided that cost breakdown. At that time, around 15.4 cents of every dollar went toward marketing the textbooks, 11.7 cents went to the authors, and the largest chunk—32.2 cents—went to the basics: paper, printing, and paying publishers' employees.
How much students spend on their textbooks depends on whom you ask. According to Eric Weil, managing partner at market research firm Student Monitor, a student spends around $535 per year on textbooks. According to NACS, a student spends $655 for required course materials. The College Board puts the annual cost of college books and materials at $1,168 for students at public four-year universities—a figure that is even higher for public two-year and private four-year schools.
Students aren't happy about those costs. Around 75 percent of students agree that the cost of textbooks is "excessive," according to Weil. "There's no excuse for a calculus textbook to cost $250. That's just insanity," says Nicole Allen, affordable textbooks advocate at Student PIRGs, an association of student advocacy groups. Differential equations, after all, were the same in 1960 as they are now; charging ever-increasing costs for the same information, says Allen, is unjustifiable.
Publishers say the cost matches the work put into creating the books. "If you want a concept book in black and white, go get it, and it will be incredibly cheap," says Bruce Hildebrand, executive director of higher education at the Association of American Publishers. "What faculty are looking for are calculus books that have interactive components and have applications," he says, like the website codes that accompany many books and allow students to learn via online demonstrations and quizzes.
According to Hildebrand, developing and producing a textbook takes three to five years on average, and can be even take more than a decade for some science books. When students plunk down hundreds of dollars for academic tomes, he says, they are paying for this labor-intensive process.
For this reason, e-textbooks that are gaining prominence in the marketplace may not be much cheaper than their physical counterparts. Content, not paper, is the key cost in producing a book, says Rich Hershman, director of government relations at NACS. And the cost of bringing textbooks into the digital age may even push book costs higher.
"Investment in technology has been a major, major driver of where they've been putting their investments," says Hershman.
Will Ethridge, chief executive of Pearson North America, told the New York Times earlier this month that over the past decade his company has invested $9.3 billion in new digital educational tools.
It's not just high-tech add-ons that are pushing the price of the books. Publishers claim that old-fashioned reselling adds to the cost.
"The single greatest contributor to the price of a textbook is a used textbook," says Hildebrand. As students use these as substitutes for new books, in other words, it creates fiscal pressures on publishers.
Of course, telling that to a the line of students at the GWU checkout counter may not inspire them to trade their books in for the new versions. (Just as a crowd of students suddenly willing to pay full price may not inspire publishers to pull their prices downward.)
Hildebrand also raises another point that might be lost on a student standing in the biology aisle: Higher education costs are also rising. For a student who will eventually accrue tens (or hundreds) of thousands in student debt, he points out, textbooks are just a small part of the large cost puzzle.
While students may be taking on more and more debt that they will largely deal with after graduation, Allen says that high textbook prices mean students become much more cash-strapped while they are still pursuing their degrees.
"Especially at community colleges and institutions where there's much lower tuition, textbooks really can be one of the largest expenses students face," she adds.
According to Student Monitor data, students buy only around 77 percent of all required textbooks. Not all of this is cost-related: 23 percent of students report that their professors don't use all of the "required" books. But 22 percent of students say they didn't buy all of their books because they couldn't afford a new book and 10 percent said they couldn't afford a used copy.
Students cut costs by skipping some of their books, says Weil, but other more recent phenomena—textbook rentals and Amazon, for example—have made for a counterintuitive pattern: "The cost of textbooks is going up, but what students spend for textbooks has declined," he says. While students spend around $535 now, he says, that is down from $669 in 2005-2006.
Students who don't like their textbook costs may not be able to influence the publishers, but they could maybe go to the middleman—the professor that picks the books. Not that the professors can always do much about it.
"If I need to have the book, the difference between one book versus another book in terms of price tends not to be that great," says David Reibstein, professor of marketing at the Wharton School at the University of Pennsylvania.
As both a textbook author and assigner, Reibstein has a unique perspective on the matter of what goes into a textbook. He says that even though many basic concepts do not change, regular updates to textbooks, in his field at least, are necessary, if only to make sure that examples are current and relatable.
As for all of those high-tech supplements, he says, it's simply a matter of what professors (and publishers) prefer.
"Publishers tell me that many people who do use the textbooks do use those exercises, and therefore it's going to make it more useful if I share my approach to it with others," he says.
That may work for some professors, but not him.
"I've been teaching for a long time, and I've never used any of that," he says, which may save his students some time in front of the computer. Then again, use it or not, it's something they're all still paying for.
Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter at @titonka or via E-mail at email@example.com.